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Foxwoods Casino License Yanked

PHILADELPHIA (CBS) –Pennsylvania gambling control officials today decided to revoke the casino license of the Foxwoods group, after the group repeatedly failed to meet deadlines over the past four years.

This means, pending a likely appeal by the Foxwoods group in the courts, this casino project is dead and the casino license can be put out to bid again. Pretty much anyone could come in and bid for Philadelphia’s second slots license, and a casino would not have to be built just on the Foxwoods lot at Delaware Avenue and Reed Street in South Philly (above, in file photo) — it could be proposed for anywhere in the city, subject to approval by the Pennsylvania Gaming Control Board.

The board’s action throws up a big question mark as to when a second Philadelphia casino will open.

Attorneys for Foxwoods’ investors and for Harrah’s went before the PGCB to lay out their agreement intended to salvage the project. But Cyrus Pitre, the board’s chief enforcement attorney, declared the agreement inadequate.

Fred Jacoby, an attorney for the investors, believes the agreements, as filed with the board, were solid.

“I was shocked — I really didn’t expect to see revocation,” Jacoby said afterward.

The board members who voted to revoke the Foxwoods license did not comment on why, either during or after the meeting.
After the PGCB’s session in November, the chairman of the panel had vowed that the license for the Foxwoods project would be revoked at today’s meeting if investors failed to meet last Friday’s deadline to file documents pertaining to a new deal with Harrah’s intended to rescue the project (see previous story).

Documents were received by the gaming board, but it was apparent during today’s proceedings that the filing contained many holes, especially regarding financing for the project.

Foxwoods was originally granted one of Philadelphia’s two slots licenses in December 2006, and the original plan called for a nearly 400,000-square-foot casino on a vacant lot on the Delaware River in South Philadelphia. But delays in city approvals and a bad economy dramatically slowed the project’s progress.

Two years ago, backers considered moving the casino to the Gallery on Market Street in center city, but the state gaming board and neighborhood opposition stopped the move.

Early this year, Las Vegas billionaire Steve Wynn joined the project with financing but abruptly dropped out weeks later.

Last week, attorneys filed paperwork with the state to give Caesar’s — operator of Harrah’s casino in Chester, Pa. — management of the project that originally was largely controlled by the Mashantucket Pequot tribe of Connecticut and local investors Ed Snider, Lewis Katz, and Ron Rubin.

But lawyers for Caesar’s admitted Thursday morning they have only gathered $46 million of $75 million in equity and have yet to secure a $200-million construction loan. An attorney for the gaming board also characterized the management agreement as not definitive and containing “blank spaces.”

The proposed casino, under Caesar’s “Horseshoe” brand, would also have been roughly half the size of Foxwoods’ original proposal.